Biden’s ACA Enrollment Confession: What’s Next?

Vice President Joe Biden confirmed Wednesday what analysts and insiders have long predicted about the Affordable Care Act’s first open enrollment season: the numbers will most likely fall short of original White House expectations.

Biden told a small group of people in Minneapolis that the ObamaCare rollout is off to a “hell of a start” and that it will be tough to get the target on the number of people signing up for coverage by the March 31 deadline. "We may not get to seven million, we may get to five or six, but that's a hell of a start," Biden said, according to a pool report.

The Obama Administration had initially projected to have 7 million people enrolled on a state or the federal exchange in year one, with 2.7 million of them being young and healthy enrollees.

Almost two weeks ago, the Congressional Budget Office revised its initial projections down to 6 million enrollees from 7 million in year one of the law.

Since open enrollment period kicked off on Oct. 1, 3.3 million Americans have selected plans on a state or the federal exchange, with 25% being between the ages of 18 and 34--the much-needed younger demo that will help offset the costs of insuring older and less healthy individuals.

Under the ACA, every individual in the country has to have insurance by the end of open enrollment period. If they fail to secure coverage, they will face a fine of $95 a year, or 1% of their annual income for failing to comply.

With a little more than five weeks left until the end of open enrollment, it’s no surprise the administration is casually resetting expectations, says Larry Kocot, visiting fellow at the Brookings Institution.

“This is a soft message to recalibrate expectations,” Kocot says. “If they can move the number down, they can revise [ahead of the enrollment period deadline]. The real question is who are these people—how do they impact risk pools?”

‘Enrollment Crash’

One of the key areas of debate about the enrollee pool under the ACA has been how many of the enrollees have actually paid their premiums.

The Department of Health and Human Services is defining enrollments among those who have “selected” plans, meaning they may or may not have yet paid their first month’s premiums.

Traditionally the insurance industry counts people as enrolled once they make the final step in paying their premium.

The New York Times reports that one-fifth of the enrollees have yet to make that premium payment as of last week, and Bob Laszewski, who writes the Health Care Policy and Marketplace Blog, wrote on Feb. 7 that industry sources report 80% of new enrollees have made their first month’s payment.

Sam Baker of the National Journal,called the lack of payments an “enrollment crash” and says the Obama Administration may eventually have to revise its enrollment stats down.

Kocot says enrollment data is a rolling report, with insurance companies reporting new stats to HHS on a monthly basis. “They won’t revise midstream; they’ll wait until they have actual data at the end of March or early April,” he says.

But getting the demographics of who actually has made payments is an entirely separate issue, says Vishnu Lekraj, senior insurance analyst for Morningstar.

“Young people do pay their premiums from what I know—they aren’t necessarily paying late” Lekraj says. “The number of young folks in the exchanges now should increase by the end of March. But if they pay their premiums or not is another story—usually they do.”

But premium payments also have to be consistent, argues Devon Herrick, senior analyst at the National Center for Policy Analysis. Technically, an enrollee can make his or her first month’s payment, and then not make a payment for up to 90 days before an insurance company can remove him or her from their coverage plans.

“It’s not just making the first payment—its making the second and third,” he says. “We won’t have any official work on that for at least three to five months. Insurance companies may let that trickle out, if people who signed up didn’t follow through.”